Jammu and Kashmir GST council meet starts today
Jammu and Kashmir finance minister Haseeb Drabu said the shift to goods and services tax marks the emergence of a new federal India and that the state will convene a special session in June to pass the law on its own terms to preserve its special status.
The crucial GST Council meeting -to be chaired by finance minister Arun Jaitley on May 18-19 -will decide on tax rates before GST rollout from July 1. The tax brackets are 5, 12, 18 or 28%.
Referring to GST as the most significant tax reform since In dependence, he said state revenue is likely to go up about Rs 2,000 crore.
“We might be behind the schedule, but we will ta ke it to assembly and get the GST law passed, most probably in the last week of June. We will try our best to work out a system which is in consonance with the regime and also protect domestic investors,” Drabu told ET.
Drabu said the decisions will be seen as Srinagar declaration for entry into the new tax regime. With the GST system, he said, no new law is being extended to the state and that things are just being redesigned.
“In 1991 the entire economic regime was changed and no state was consulted. Today, even on a change in rate, everybody is consulted. This is the emergence of a new federal India,” said Drabu, clarifying that there is no conflict between GST council and legislature.
“GST council is the first federal institution in the country. It is a new concept, which has to be seen in a new light.” He said the state has already changed the proposed administrative tax structure into advisory consultancy system.
The state finance minister stressed that he wants to be more progressive and utilize constitutional flexibility of the state positively, rather than defensively. He envisions to be part of the new fiscal federalism framework, without compromising financial autonomy.
The finance minister has even proposed to include real estate and power in the GST regime and is thinking to start a tourist refund system as if prevalent at several tourist destinations across the state.
Fundamental difference between the tax implementation in J&K and rest of the country, Drabu said was that all states in India levy taxes under article 247 of the constitution of India and J&K levy taxes under section five of the constitution of J&K. “So we have to make little technical changes as there are some
The business community in J&K were apprehensive about the implementation of GST fearing it would compromise financial sovereignty of the state and also incur huge losses to the businesses.
“As of now we are protected with the compensation clause. In the base year, we along with few other states, the exemptions we have given, have been monetized and put. The state will grandfather its exemptions and center will do it as well,” said Drabu. Source – http://economictimes.indiatimes.com [18-05-2017]